Which of the Following Statements Is False

question 12

Multiple Choice

Which of the following statements is false?

• A) Commercial banks, finance companies, and factors, which are firms that purchase the receivables of other companies, are the most common sources for secured short-term loans.
• B) The factoring arrangement may be without recourse, in which case the lender bears the risk of bad-debt losses.
• C) In a floating lien, general lien, or blanket lien arrangement, specific inventory is used to secure the loan.
• D) If a firm sells its goods on terms of net 30, then the factor will pay the firm the face value of its receivables, less a factor's fee, at the end of 30 days.

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Definitions:

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Truth-In-Lending Act

U.S. federal law designed to promote informed use of consumer credit, by requiring disclosures about its terms and cost.

Disclosure Requirements

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